Product, Service & Design Innovation
Innovations in Business Models, Water Stewardship, Engagement Abound on Final Morning of #SB14London

The circular economy and water stewardship dominated the morning’s agenda on the final day of SB ’14 London. After leading us through a host of thought-provoking plenary presentations Tuesday morning, our two event MCs - Forum for the Future chief executive Sally Uren and The Guardian’s executive editor Jo Confino – expressed their enthusiasm for the ideology that underpins the circular economy.

Confino felt it was a concept that could go mainstream. “Business can buy into it easily as it doesn’t fight against the current capitalist system,” he said, while Uren was optimistic about the level of brand innovation it could potentially unlock.

One company at the forefront of this is Philips, which is developing commercial propositions such as ‘selling light’ through a performance-based service model. Markus Laubscher, the company’s circular economy project manager, said: “For us, the circular economy is the idea you preserve the embedded labour, capital costs and materials of hardware, and monetise them as long as possible at highest value, ideally as a service.”

This has forced Philips to rewrite its corporate operating systems to ensure circular principles are deeply embedded. Laubscher confronted the audience with some key questions: “What if the circular economy was adopted as a strategy to tackle burning business issues instead of a sustainability agenda? What if service managers decided which products were made to create value?

“The circular economy is commonly reduced to recycling and seen as a ‘do good’ sustainability agenda that doesn’t pay financially. We have to challenge this ‘end of pipe’ solutions mentality,” he added.

Another pioneer in this area, flooring specialist Desso, has adopted cradle-to-cradle principles throughout its product range. Rob Kragt, Desso’s CSR marketing manager, said the company had launched a leasing programme for its carpet tiles and was sourcing new supply channels through upcycling waste materials from other industries such as chalk and discarded fishing nets.

When asked by Uren what advice he would give to other organisations looking to make such a transitional journey, Kragt replied: “The potential for a circular economy begins with the mindset in your own organisation. Innovation in Desso is coming from our internal people - you don’t need external advisors to begin with.”

The circular economy is also resonating with Novelis, a global aluminium product producer and beverage can recycler, in its drive to scale up sustainable packaging. John Gardner, chief sustainability officer at Novelis, said that in recent years the company had started to challenge its ‘take, use, discard’ mentality.

The result has been a $2.5 billion investment in sustainability to help reach a goal of 80 percent recycled content for its rolled sheets by 2020, which will remove 10 million metric tons of greenhouse gas emissions from Novelis’ value chain. The company also recently opened what it’s calling the world’s biggest aluminium recycling plant.

“We are doing lot of work on R&D to optimise closed loop systems. There is a lot of effective downcycling in the aluminium industry - our aim is to close the loop,” Gardner told delegates. He added that this represents a massive change in terms of the supply chain. “We’ve gone from using four main raw material suppliers to sourcing from 100,000 community recycling centres around the world.”

Another inclusive business model was presented by Nigel Stansfield, chief innovation officer at carpet manufacturer Interface. Like Desso, it is also sourcing yarn for its products from discarded fishing nets through its Net-Works initiative, which provides an extra source of income for fishing communities on 14 Philippine Islands.

“Radicalising your supply chain can’t be done alone. This initiative had to community-led, born from grassroots efforts … we built the programme one island community at a time,” Stansfield said. He added that Interface had established itself as “a valuable supplier to our supplier,” giving the audience a glimpse of how supply chain dynamics might shift in the future.

The topic of water stewardship was picked up by Paul Dickinson, executive chairman of CDP, Mary Noah Manarang, president of Vetiver Farms in the Philippines, and Noam Buchalter, marketing manager for EMEA at Kimberly-Clark.

Dickinson centred on corporate water risk – a study launched today from CDP found that two-thirds of the world’s largest companies are now reporting exposure to water risks, with 22 percent anticipating that this could limit the growth of their business.

“Climate change is the shark, but water is the teeth of that shark,” Dickinson noted. “There are big moves by brands to cut water consumption. I’m going to suggest to you that sustainability and water management is potentially pretty big business today.”

Taking a different tack, Manarang outlined the benefits of Vetiver grass as a natural solution for cleaning polluted rivers and streams through a unique creative proposition – the Hana Water Billboard. The properties of Vetiver are remarkable: the grass will tolerate high levels of nitrates, phosphates, heavy metals and agricultural chemicals, meaning it can be used for treating wastewater, rehabilitating mine tailings and stabilizing landfills.

“Our mission is for Vetiver to be an accepted environmental product,” Manarang said, calling the water billboard “a new standard in clean messaging.” She said her company was now working on its biggest project to date with Balfour, using Vetiver to protect the base of wind turbines.

Relating water access to personal sanitation and dignity, Buchalter’s company has found a way to inject social benefit into its Andrex toilet roll brand. It has teamed up with Unicef and UK supermarket chain Sainsbury’s to help fund community sanitation programmes in Angola. For every nine-pack of Andrex brought, 25 pence will be donated to the initiative.

“What if we could bring the dignity of improved sanitation to all? Over one billion people still practise open defecation due to a lack of access to safe, clean toilets. Ultimately it affects people’s dignity – that’s the connection with our brand promise, which is to elevate the standard of clean,” Buchalter explained.

Asked by Confino how this project might be scaled up going forward, Buchalter said: “Essentially the questions we will be asking ourselves is, do we go after more packs with the same retailer, or go with more retailers? Do we go into other countries? How do we keep it growing year after year?”

Continuing the theme of brand innovation, Lucy Carver, director of Sky’s Bigger Picture, highlighted the Sky Rainforest Rescue campaign as a great example of how to inspire and motivate viewers to make a difference. “Bad news stories can paralyse people into inaction,” she said. “We wanted to reimagine what our role would be as an influencer.”

Sky has partnered with WWF on the project to help protect an area of the Amazon rainforest – about one billion trees. The company has not only offered a funding platform for the initiative, but created around 150 hours of programming to highlight the issues at play using various assets to reach out to viewers such as celebrity figures.

“We found that talent leads – the most successful programme was the one we did with Freddie Flintoff. Using that type of talent to talk to our audience on air was hugely valuable,” Carver said.

Last up was Greenpeace UK director of IT Andrew Hatton, who gave some insight into how to leverage humour and social media when engaging in campaign work. The organisation has recently targeted the world’s biggest IT and Internet companies, asking them to clean up their act when it comes to powering their digital platforms.

“The main reason we get involved in this area is because of the sheer growth of cloud computing, due to more of us spending time online, and more people coming online. The fundamental challenge now is energy demand – what’s driving the devices, but also the storage.”

Talking about Greenpeace’s #ClickClean campaign, Hatton said it wasn’t about not using the Internet, but building a better Internet. The organisation recently ranked different cloud providers against a scorecard, one of the criteria being energy transparency – for example, where it is sourced, who is providing it and what the grid mix is.

“A lot of companies were very resistant at first to disclose such information, but they are starting to coming round now,” Hatton said. Pushed by Confino on who he felt the biggest villain in this space was, Hatton replied: “Amazon are among the worst at not powering their cloud by renewables. The challenge at Amazon is around transparency.”